Hutchison Whampoa sells one third of Three-O2 stake to investors

Five foreign investors to invest in Three UK following O2 acquisition

Hutchison Whampoa, the Hong Kong investment company that owns Three UK, is to sell-off one third of its combined UK mobile business to a multinational group of investors, led by the Canada Pension Plan Investment Board (CPPIB).

Hutchison Whampoa agreed to acquire O2 from Telefonica in March for £10.25bn, and now plans to sell 33 per cent of the newly formed mobile outfit after the acquisition to five foreign investors, which include CPPIB, GIC Pte of Singapore, Caisse de depot et placement du Quebec, Limpart Holdings and BTG Pactual.

Canning Fok, group managing director of Hutchison Whampoa, said that the willingness of the investors to commit substantial capital to this investment reflects what he believes is a continued confidence in the UK economy and "its commitment to maintain and foster a dynamic and world leading telecommunications sector".

He added that the investors shared Hutchison's vision and belief of creating a business with the necessary scale to enable it to compete effectively in the UK marketplace.

The five investors have agreed to pay a grand sum of £2.77bn in cash on completion of the deal with a further maximum of £330m. The purchase of O2 will be partly funded by a bank-debt facility of £6bn.

The deal would make Three the biggest network in the UK, surpassing EE - which itself has been acquired by BT. Like BT, Three UK will have to undergo some scrutiny from the competition authorities, particularly as both acquisitions would leave the UK telecoms sector with just three main mobile telecoms operators - consolidation in Ireland has already led to a sharp rise in prices.

Completion of the deal is not expected until 2016, provided that UK and EU competition authorities approve.

This week, BT began putting forward the case for its £12.5bn takeover of EE to the Competition and Markets Authority (CMA). BT's rivals across all markets, including Sky, TalkTalk and Vodafone fear that the acquisition would give it far too much market muscle. It does, however, reflect a trend towards consolidation across the EU as mobile data - and therefore access to backbone networks - becomes more important.